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View metadata, citation and similar papers at core.ac.ukbrought to you byCOREprovided by Research Papers in EconomicsUsing matching, instrumental variables and control functions to estimate economic
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How to fill out using matching instrumental variables

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Step 1: Start by identifying the instrumental variables (IVs) that are strongly correlated with the treatment variable and are not directly related to the outcome variable.
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Step 2: Use the IVs to create a model for the treatment variable, using regression or other statistical techniques.
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Step 3: Estimate the treatment effect by comparing the predicted values of the treatment variable obtained from the IV model with the observed values.
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Step 4: Assess the validity of the IV assumptions, such as the exclusion restriction and relevance.
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Step 5: Interpret the estimated treatment effect and draw conclusions based on the analysis.

Who needs using matching instrumental variables?

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Researchers and analysts who want to estimate causal effects in observational studies.
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Economists and social scientists who work with data that may suffer from endogeneity or selection bias.
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Policy evaluators who need to assess the impact of interventions or policies in a real-world setting.
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Any individual or organization seeking to make informed decisions based on rigorous statistical analysis of observational data.
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Using matching instrumental variables is a statistical method employed to estimate causal relationships when random assignment is not feasible. It involves identifying instruments that correlate with the treatment variable but do not directly affect the outcome, allowing researchers to control for confounding variables.
Researchers conducting observational studies that aim to infer causal relationships are typically required to apply matching instrumental variables, especially when they need to account for potential confounding factors.
To use matching instrumental variables, researchers must first identify suitable instruments, validate their relevance and exogeneity, and then apply statistical techniques such as regression analysis or two-stage least squares to analyze the data.
The purpose is to provide unbiased estimates of causal effects by accounting for unobserved confounders that may otherwise distort relationships between treatment and outcome variables.
Researchers must report the instruments used, the methodology for selecting and validating these instruments, the estimation technique applied, and the results including effect sizes and confidence intervals.
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